The Need for Transition Planning

Changing demographics and the Need for Transition Planning

For previous generations, leaving work meant retirement and moving into the ‘golden years’. For our grandparents, the then current retirement age meant that they finished work in their sixties and had a life expectancy of early seventies and so their ‘retirement’ was a relatively short period of time.

Typically their health deteriorated so that the stereotype of a retired person was of someone set ‘out to pasture’ – alternating between golf and sitting on the porch in a rocking chair.

The 5.5 million baby boomers in Australia are in their fifties and sixties, and their lives will be very different to those of their predecessors:

Their life expectancy is considerably longer – well into their eighties, and so their ‘retirement’ spans 20 or 30 years or more; and
Improvements in health science mean that these baby boomers are generally healthy, and their ‘retirement’ will involve a more active and meaningful life.
These assertions are borne out by the recently released Intergenerational Report, prepared by the Commonwealth Treasury. The report states:

Australians will live longer and continue to have one of the longest life expectancies in the world. In 2054‑55, life expectancy at birth is projected to be 95.1 years for men and 96.6 years for women, compared with 91.5 and 93.6 years today.’ 

‘Not only will Australians live longer, but improvement in health means they are more likely to remain active for longer. “Active aging” presents great opportunities for older Australians to keep participating in the workforce and community for longer, and to look forward to more active and engaged retirement years.’

‘As Australians live longer and do so in better health, more Australians will continue to lead an active lifestyle and participate in the workforce after they reach traditional retirement age.’

‘Participation rates among those aged 65 and over are projected to increase strongly, from 12.9% in 2014‑15 to 17.3% in 2054‑55. This represents a significant opportunity for Australia to benefit more from the wisdom and experience of people aged over 65.’

The following table from the Report confirms that life expectancy at birth has increased, and will continue to increase in the future.

male-and-female-life-expectancy

The report also refers to a Bulletin from the Australian Institute of Health and Welfare, which concludes that there have also been substantial ongoing increases in the length of time for which Australian men and women can expect, on average, to live without disability.

In addition, attitudes have changed. Decades ago, the media portrayed women in their forties and fifties as elderly; now it shows them as young and active ‘80 is the new 60 … 60 is the new 40’. Thus, baby boomers in their fifties and sixties are not ready to go to ‘out to pasture’ or sit on the porch in their rocking chairs. Instead, they are getting ready to move into a new stage of active life, that can go for another 20 or 30 years.

This shows the important of planning for retirement and an effective way to do this is to create a retirement planning checklist.

Whether you are planning for retirement, looking at transitioning out of your business or are already retired and looking at what more you can do, Transition Planning is here to assist you.

Transition Planning Australia’s retirement planning tools, information and guidance will help you make the right decisions for your life after work and for the future of your business. For more information about developing a plan for your next phase and to discuss the need for Transition Planning, speak with Transition Planning Australia today.

 

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